News background & trading ideas for 31/01/2019

31 thg 1, 2019

Yesterday was exceptionally rich in terms of macroeconomic statistics. Let’s go over the foremost data. The Eurozone once again shocked euro buyers with weak economic data, according to which consumer confidence decreases, as well as the business climate and economic confidence in general. However, the euro has already accustomed to weak statistics from the Eurozone, and there have been no sales.

Data on employment in the US from ADP surprised: with the forecast of +181K, the fact came out at around +213K. On the eve of Friday's official statistics on the US labor market, this is a very positive signal for the dollar.

The highlight event of yesterday was an announcement of outcomes of FOMC meeting. As markets expected, the rate remains unchanged. Comments generally were dovish. Among interesting details it’s worth admitting the disappearance of the phrase “further rate hike”, and markets got it as a signal that it may not be new hikes at all, moreover Fed is willing to reduce an interest rate. So in that light things started to move exactly as we expected - the dollar came under sales. We continue to recommend the dollar sales.

Today is interesting primarily for Eurozone GDP data. Amid a series of disappointing statistics from the Eurozone, it will be rather strange to see figures better than forecasts. So, it is quite likely that the euro will remain under downward pressure today. Nevertheless, yesterday's breakdown of 1.1470 is a strong signal in favor of further growth of the euro. So we recommend euro purchases against the dollar.

Besides, it’s worth paying attention to personal income and outlay data in the USA. But by and large, markets will wait tomorrow and a block of data on the US labor market. About our expectations and trading recommendations, we will talk in tomorrow's review.

The oil market also did not go without winning movements: the asset made another attempt to hold above the key resistance of 53.50 (WTI brand). A trial seemed a prosperous one, so today, you can try to buy oil intraday, at least until its quotes are above 53.50. The minimum target is 57.20. Stops are below 53.30.